LONDON (Reuters) -Elementis shareholder Franklin Mutual Advisers has urged the board of the British chemicals company to "initiate a sales process immediately" following the news it had rejected another takeover approach, a letter obtained by Reuters shows.
In a letter sent to Elementis (LON:ELM) Chairman John O'Higgins on Thursday, senior Franklin Mutual portfolio managers Steve Raineri and Chris Meeker said they were "deeply concerned" that the Elementis board appeared not to be acting in shareholders' best interests. The fund said it controls 9.8% of Elementis shares.
Reuters on Wednesday reported that New York-based private equity firm KPS Capital Partners in December submitted a bid valuing the FTSE 250 company at about 160 pence per share, but the Elementis board rejected the offer.
"In our view, this recent interest from KPS, coupled with prior offers from Minerals Technologies and Innospec, again confirm Mutual Series' view that the Company is a desirable acquisition target," the letter said.
"We believe this indication of interest should be the catalyst to launch a formal process to maximise shareholder value."
Elementis declined to comment.
The maker of chemical and personal care products has previously rebuffed calls by shareholders to put itself up for sale.
Franklin sent a similar letter in September asking for a sale process and criticising the company's share price performance. At the time, shareholders Odyssean Capital and Schroders (LON:SDR) Investment Management echoed Franklin's request, The Times newspaper reported.
Elementis responded that an immediate sale of the chemicals group was not ideal given the "substantial value still to be realised".